Nayara's Legal Strategy in the SAP India Decision: A Review

There have been thousands of posts on LinkedIN and in the internet on the Delhi High Court’s decision in Nayara v SAP. This post is not about the judgment but about Nayara’s legal strategy. Often, the victor (in this case temporary victor) alone gets appreciated. But in a situation of uncertainty and tremendous pressure, Nayara’s legal strategy seems to have worked. This post is an examination of Nayara’s strategy.

European Union Regulation (EU) 2025/1476 dated 18.07.2025 amended the EU Regulation (EU) No 269/2014, which had the effect of declaring business with the Nayara as prohibited. The Sanctions List stated:

“Nayara Energy Limited is an entity established in India and operating an important refinery in Vadinar. That refinery is 49 % owned by the Russian State oil company Rosneft, and is a major refiner of Russian crude oil. The energy sector, in particular the oil sector, is a sector providing substantial revenue to the Russian Government. Therefore, Nayara Energy is involved in an economic sector providing a substantial source of revenue to the Government of the Russian Federation, which is responsible for the annexation of Crimea and the destabilisation of Ukraine.”

This prompted Microsoft and SAP to stop services to Nayara. Nayara sued SAP and Microsoft (here). As per information available in the public domain, Microsoft restored services before the case went for hearing (here). On the other hand, SAP did not. So Nayara sued SAP in the Delhi High Court.

The proceedings against SAP led to a decision dt. 21.09.2026 by the Delhi High Court on interim application for restoration of services. In the judgment, Hon’ble Mr. Justice Vikas Mahajan ordered:

“276. Under the facts and circumstances discussed hereinabove, the application is allowed and the defendant no.1 is directed to restore the status quo ante as it existed prior to 24.07.2025, by immediately resuming all enterprise and software support services to the plaintiff under the respective agreements.”

The judgment, it may be noted, was an interim order: "277. It is clarified that the observations made hereinabove are purely prima facie in nature for the purpose of adjudicating the present application under Order XXXIX Rules 1 & 2 CPC and shall not have any bearing on the final adjudication of the suit on merits..”

The events unfolded this way: Nayara was included in the Sanctions List on 18.07.2025, which was a Friday. On 24.07.2025, Thursday, SAP India cited the EU Council Regulation and suspended the access to SAP Portal. On 20.09.2025, Nayara sued SAP India in the Delhi High Court.

Nayara relied on the governing law clauses in the contract (General Terms and Conditions-GTC) with SAP, which provided for Indian law as the Governing law and exclusive jurisdiction with Delhi courts. The agreements, interestingly, did not provide for arbitration. Nayara's legal action against Microsoft was perhaps filed under Section 9 of the Arbitration and Conciliation Act, 1996.

Coming back to the SAP case, the GTC also contained another interesting clause: “In the event of any conflicts between foreign law, rules, and regulations, and Indian law, rules, and regulations, Indian law, rules, and regulations shall prevail and govern.”

Nayara’s strategy was to heavily rely on the governing law and the conflicts clauses to argue that EU law on sanctions was not applicable.

The second legal strategy was to rely on Section 52(1) of Bharatiya Sakshya Adhiniyam, 2023 [Section 57(1) of the Indian Evidence Act, 1872] and argue that EU law/ foreign law was not covered in BSA. While expert evidence could be led on foreign law, it was not binding on Indian courts.

The third part of the strategy was to contend that the onus of proving EU Regulations and the laws of Germany was on SAP India, which relied on these. The court was of the view that all these things had to be proved during trial, especially since expert witnesses had to be cross-examined.

The fourth strategy was this: the contract contained a trade sanctions clause. It stated that the software delivered shall be subject to export law of US, EU, etc. However, Nayara relied on a crucial omission in the clause: it covered only software and documentation but did not cover support services.

The fifth legal strategy was to overcome SAP’s argument that owing to force majeure circumstances, SAP could not offer its services considering Sections 32 and 56 of the Contract Act. This was done by arguing that:

• There was no force majeure as contended by SAP because the EU Regulations was yet to be proven in court and therefore it could not be relied on to argue that performance was impossible. In the words of the court, this was the “fundamental hurdle” for SAP.
• Commercial hardship was not impossibility: SAP’s argument was not that support services had to be routed only through SAP Germany. There was no requirement that the services had to be from Europe.
• The territory licence from SAP was worldwide and therefore SAP could not argue to restrictively read it.
• Technical support services could be offered through any country.

The sixth strategy was a purely legal approach: overcoming the hurdles in the Specific Relief Act, 1963: courts cannot specifically enforce an agreement which is by its nature determinable, which runs into minute details such that court cannot enforce its material terms and performance of the agreement involves continuous duty which the court cannot supervise. These would have probably been taken care of by its external counsel. Nayara argued that the concerned agreement was specifically enforceable: it was not by its nature determinable, as it did not contain a clause for termination for convenience.

The seventh legal strategy was to argue that the agreement did not allow SAP to terminate it on account of foreign sanctions.

SAP came up with a brilliant counterargument: there was a trade sanctions clause in one of the instruments forming the contract: the Delivered Support Agreement, and that therefore all the concerned instruments formed a composite agreement. Unfortunately, SAP’s pleadings did not support this argument. One crucial omission in SAP’s pleadings, which was heavily relied on by Nayara was that SAP did not rely on a specific agreement or a clause to support its actions. Also, Nayara’s stance, which was upheld by the court, was that the instruments did not form a composite agreement:

• the Delivered Support Agreement (DSA) which contained the sanctions clause did not refer to the other instruments- the Order Forms and the Support Schedule.
• The DSA was to be provided through a partner (Def. No. 2) only in respect of specific modules.
• The territory in the DSA was only India while the other agreements was worldwide.
• Also, the fee for the DSA was miniscule as compared to the other instruments.

The minute details as a defence against specific relief was countered by Nayara by arguing that this defence is no more available in view of the amendments to the Specific Relief Act in 2018. As regards the arguments regarding continuous duty which court had to supervise, Nayara argued that the relationship between the parties had been going on over a decade and that the agreement encapsulated the obligations of the parties.

No matter how good a party’s strategy are, in an interim relief stage, the triple test had to be pleaded and established: prima facie case, balance of convenience and irreparable injury. Nayara argued that such abrupt and unilateral suspension of services was ex facie illegal. For irreparable injury and balance of convenience, Nayara argued that migration to alternative frameworks made the entire software ecosystem to vulnerabilities, especially in the background of the current geopolitical situation.

Nayara also pleaded that it contributed to 8% of India’s energy needs and therefore uninterrupted flow of tech support was required. SAP did not contest this. This was important in an energy scarce nation like India. On the other hand, Nayara argued and the court found that no injury would be caused to SAP and there was no real or imminent threat of prosecution for performing its obligations.

Ultimately, Nayara’s application for restoration of status quo ante under Order 39 Rules 1 and 2 (interim injunctions) was allowed. The Delhi High Court’s decision can be accessed from here.

Victories in courts are a combination of excellent arguments by counsels, deep insight of in-house counsels and the tech and financial teams, and some luck. The judgment depicts intense application of mind by the parties. Despite odds, Nayara’s strategy seems to have found success, at least for now. Given the involvement of sanctions, it is most likely that SAP will appeal against the decision.

[Note: Image in this post made through AI is entirely fictional and is not related to Nayara]

Non-Recoverable Contract Costs in Bangladesh’s Model PSC 2026

In last week’s post, we discussed various non-recoverable costs in the recent Sri Lankan Model Petroleum Resources Agreement. In this post, we discuss non-recoverable costs Bangladesh’s recent Model Offshore Production Sharing Contract (“PSC”).

Clause 14.3 of the Model PSC states:

“Subject to the Accounting Procedure and the auditing provisions of this Contract, Contractor shall recover all costs and expenses not excluded by the provisions of this Contract and the Accounting Procedure in respect of all the Exploration, Appraisal, Development, Production, Abandonment and related operations hereunder with respect to the Contract Area to the extent of and out of a maximum of seventy five percent(75%) of Petroleum from both shallow and deep sea blocks per Calendar Year of all Available Oil/ Natural Gas/ Condensate/ NGL from the Contract Area (hereinafter referred to as "Cost Recovery Petroleum").” (emphasis added)

Clause 14.3 excludes recovery of those costs which are held as such in the PSC and its Accounting Procedure (Annexure-B to the Model PSC). Section 7 of the Accounting Procedure contains a list of 26 heads of non-recoverable costs.

Similar to the exercise we did for Sri Lanka’s MPRA, we have classified these 26 heads into distinct buckets and have tabulated it:

Category	Description	Section 7 Items
Before Effective Date / Outside Bangladesh / Outside Measurement Point	Costs incurred before the Effective Date not incurred under Work Program and Budget; costs incurred beyond the measurement point; income tax and other taxes incurred outside Bangladesh; certain administrative overhead outside Bangladesh.	c, h, i, s
Financing and Fund-Raising Costs	Interest and financing charges; expenditure to negotiate, obtain or secure funds, exchange losses on financing, etc.; expenditure for furnishing and maintaining bank guarantees and indemnities	a, q, r
Unsupported / Unapproved Costs	Costs lacking proper original records; charges for goods & services unsupported by supplier/ sub-contractor agreement costs; not included in approved Work Program and Budget; emergency expenditure not timely reported to Petrobangla; donations and contributions not pre-approved by Petrobangla; benefits not identified as recoverable under Section 3.1(c).	b, e, m, n, p, v
Excess Costs / Gold-Plating / Unreasonable Expenditure	Goods and services priced above international market rates; material costs exceeding permitted values; costs not reasonably required for Petroleum Operations; materials and services exceeding allowable valuation principles.	d, f, g, t
Taxes and Contractual Payments	Income tax payable by Contractor; payments under Articles 20.1-20.4 (bonuses) and 25.6 (training of Petrobangla employees).	j, o
Dispute Resolution Costs	Costs of expert determination and arbitration.	k
Fines, Penalties; losses from PSC and third party contracts; negligence	Fines and penalties; Costs resulting from willful misconduct or negligence of Contractor; amounts paid with respect to non-fulfillment of a contractual obligation with third party and loss due to non-compliance of PSC	l, x, z
Partnership / Joint Venture / Acquisition Costs	Costs of creating or managing partnerships or joint ventures; acquiring interests in the Contract or Contract Area.	u
Insurance-Related Exclusions	Costs covered by insurance; losses resulting from failure to insure; recoverable insured losses not claimed; losses that would have been covered under approved self-insurance arrangements.	w(i)-(iv)
Committee and Governance Costs	Expenses of members of the Joint Management Committee (JMC) and Joint Review Committee (JRC).	y

Like the Sri Lankan MPRA, Bangladesh's Model PSC also displays a long list of items that are not cost recoverable.

Avoiding Serious Defects in Arbitral Awards: Updation of Checklist on drafting Arbitral Awards

Recently, the Delhi High Court in Eco Green Buildtech Pvt. Ltd. Vs. Vikartan Infrastructure Pvt. Ltd. set aside an arbitral award on two grounds.

• One, the arbitrator used his personal knowledge in deciding on a particular claim. This use of personal knowledge denied full opportunity to the petitioner to deal with the same. 
• The second ground was the use of the Hudson formula to decide on a claim for loss of profit without any evidence having been adduced by the Respondent Claimant.

In a recent paper published by the India International Arbitration Centre, I came up with a checklist of about 70 items that arbitrators should take care of while writing arbitral awards. Item 32 of the Checklist states: "Whether analysis proceeds in the following manner: facts, law/ contract, application of law to facts, and conclusion?" Item 33 of the checklist states: "Whether the award deals with any argument or judgment which has not been raised or cited by the parties?"

If the arbitrator who wrote the award in the matter had taken care of these two items in the checklist, perhaps the defects which led the award to be set aside could have been avoided.

Given the number of awards set aside on the ground of lack of evidence in support of an awarded claim, a separate entry in the checklist is perhaps warranted. This separate entry will also act as a caution to arbitrators not to decide individual claims without evidence even if they rely on a formula.

I have updated the checklist by adding an Item after Item 32 and renumbering the checklist. The renumbered Item 33 reads: "Whether the arbitral awards decides on each claim/ counter-claim based on evidence and whether the evidence is clearly identified and evaluated?"

Now there are now 71 Items in the Checklist for Arbitral Awards, which can be downloaded from here. It would do well for arbitrators and arbitral institutions to use such a checklist for ensuring that arbitral awards are of the highest quality.

Formulaic Claims, Arbitral Awards and the Credibility of Arbitration

Richard Feynman made this statement criticising relying on formulas to study physics and instead focus on the underlying reality. He was of the view that one could not get anywhere merely based on the formulas. This criticism holds good for construction law too.

Indian courts have criticised claims by construction contractors based on formulae such as Hudson, Emden, etc, and have required evidence of losses. So many arbitral awards have been set aside on this ground. Some awards could escape courts’ attention.

Arbitral awards awarding claims based on formulae when there is no or inadequate evidence justify the Department of Expenditure’s Office Memorandum 03.06.2024 that discourages arbitration. One such case is SBI v. KR Anand, 2026:DHC:7793.

The Construction Contract

• Work: Construction of seventy-six flats for officers at Sector-62, Noida
• Letter of Award: 22.12.2012
• Agreement: 16.01.2013
• Contract Value: 19.81 crores
• Scheduled Contract Completion Date: 15.01.2015 (25 months)
• Extensions: 3
• Actual completion date: 23.08.2016

Arbitration and Challenge

Contractor, KR Anand, invoked arbitration and made several claims. There were a total of 17 claims. Arbitrator awarded Rs. 1.43 crores to the contractor. SBI challenged the award in the Delhi High Court on 3 claims.

Decision of the Delhi High Court on Award on Claim 1

Claim 1 was for loss of overhead expenditure of Rs. 65.81 lakhs. Rs. 20.27 lakhs was awarded. There were two main problems with this part of the award. The arbitrator attributed 205 days of delay to the contractor and 175 days to SBI but chose to decide the claim in favour of the contractor. Another problem was that there was no evidence of losses. The contractor chose do defend the award on the basis of the Emden formula. We are concerned in this post about the second limb of the arbitrator's reasoning: reliance on Emden formula.

Proof of actual loss is essential. The Delhi High Court reiterated the settled law that proof of losses is required through evidence and formulae cannot substitute evidence. The court cited the Unibros decision and held: “The Supreme Court in Unibros v. All India Radio (supra) held that reliance on a formula is not a substitute for establishing the loss actually suffered… 13. In the case in hand the damages awarded relying upon the Emden Formula in the absence of evidence to prove the actual loss suffered is contrary to the settled position of law”.

The court considered the award on this claim to have been given in disregard of the Contract Act, which required proof of losses (Para 11). The court gave another dimension to the matter: An award that relies on formula as a substitute for proof of actual losses suffers from lack of reasoning and violates Section 31(3) of the Arbitration and Conciliation Act, 1996:

“However, even on a fair reading of the award as a whole no reason emanates for the arbitrator accepting the calculation based on the Emden formula without there being evidence to prove the loss suffered or that it was difficult or impossible to prove the actual loss suffered. The award of claim no.1 falls within the teeth of Section 31(3) of the Act.”

Credibility of Arbitration

There are so many judgments that dealt with the proposition that the Delhi High Court was relying on. See, for instance, here and here. Despite this, the arbitrator chose to award this claim in favour of the Contractor. Such arbitral awards justify DOE’s OM of 03.06.2024.

Costs Not Recoverable under the Sri Lankan Model Petroleum Resources Agreement

 Sri Lanka's Model Petroleum Resources Agreement (2026) (SLMPRA) is one of the recent Production Sharing Contracts (PSC) published and available. Link to the SLMPRA is provided at the end of this post. For a PSC, the length of the SLMPRA is only 95 pages. Cost recovery is one of the important provisions of a PSC. Costs allowed to be recovered and costs not allowed to be recovered form some of the crucial provisions of a PSC. This post discusses the cost items which are not recoverable.

Article 21 of the SLMPRA deals with Recovery of Cost Petroleum. Article 1 defines "Agreement Costs" as "Exploration Costs, Development Costs and Production Costs as provided for in the PRA and which are deemed to be recoverable costs in terms of Article 21 of the PRA;". Article 21.2 classifies these costs into "Production Costs", "Exploration Costs" and "Development Costs" incurred by the Contractor.

Article 21.12 pertains to costs not recoverable. It contains a whopping list of 31 items! If these costs can be classified into distinct buckets, such a classification would be as follows:

Category	Description	Clause / Item Numbers
Before SLMPRA or outside Area/ Outside Sri Lanka	Costs before Effective Date, costs related to administrative overhead outside of Sri Lanka for specific items; Income/ other tax incurred outside Sri Lanka; Costs outside measurement point	1, 4, 9, 10, 19
Specific Payments/ Costs/ obligations under MPRA	Expenditure incurred in obtaining, furnishing and maintaining the guarantees, expenses of the members of the Advisory Committees and other Committee, Environment studies protection, Abandonment fund, Training costs. Production bonus, Signature bonus, royalty,	17, 25 to 31
Excess costs/ gold plating/ negligence/ misconduct/	costs of goods and services in excess of the international market price for goods or services; charges for goods and services not in accordance with the relevant agreement with sub-contractor or supplier; Charges for goods in excess of the amount allowed by Article 21.12; Costs not reasonably required for petroleum operations; costs of materials and services in excess of the values established under the principles in Article 21.12; costs and expenditure as result of wilful misconduct or negligence of Contractor;	5, 6, 7, 8, 20, 24
Unsupported/ Unapproved Costs	costs for which original records do not exist or are not correct in any material respect; any costs not included in approved work program and budget, unless resulting from an emergency; Emergency expenditure incurred but not reported within time	3, 14, 16,
Fines/ penalties	fines and penalties imposed by any Authority	12
Non-fulfilment of contractual obligations with third parties	amounts paid with respect to non-fulfilment of a contractual obligation to a third party; Indemnities spent on Non-fulfilment of contractual obligations with third parties	17, 22
Unrelated to petroleum operations	Expenditures for securing funds for petroleum operations; donations, contributions, or public expenditure; costs involved in creation and management of any partnership/ joint venture arrangement, or costs of acquisition of an interest under the Agreement	2, 13,21
Dispute resolution	Costs of expert determination of arbitration; attorney’s fee and other costs related thereto.	11, 18
Others	costs incurred which are covered by insurance for Included Risks, are a result of failure to insure where insurance is required pursuant to the Contract, etc.	23

The items not cost recoverable have been classified into nine distinct buckets. This PSC has one of the longest list of items that are not cost recoverable. Like in any other PSC, there are bound to be disputes on individual items in this long list. 

It would be interesting to see if the recent Model PSCs disclose such a trend, given their experience and experience of other countries in dealing with cost recovery related issues. 

Sri Lanka MPRA (2026) can be downloaded from here.

Do Courts Comply with S. 11(8) While Appointing Arbitrators?

 Section 11(8) of the Arbitration and Conciliation Act, 1996 ("Act"), as it exists now, reads:

"(8) The Supreme Court or, as the case may be, the High Court or the person or institution designated by such Court, before appointing an arbitrator, shall seek a disclosure in writing from the prospective arbitrator in terms of sub-section (1) of section 12, and have due regard to—

(a) any qualifications required for the arbitrator by the agreement of the parties; and

(b) the contents of the disclosure and other considerations as are likely to secure the appointment of an independent and impartial arbitrator."

This provision contemplates that before appointing a person as arbitrator, the Supreme Court or the High Court should seek a disclosure in writing in terms of S. 12(1) of the Act and have due regard to qualifications requirement for the arbitrator under the arbitration agreement and the contents of the disclosure and other conditions which are likely to secure and independent and impartial arbitrator.

This provision was introduced through the 2015 amendments and is effective from 23.10.2015. However, rarely does the Supreme Court or the High Courts mention compliance of S. 11 in their orders appointing arbitrator under Section 11. See, for instance, the order of the SC dt. 02.02.2026 in OT Technology Inc. v. HDFC Bank Ltd., Arb. Pet. 8/2026, which makes no mention of S. 11(8) explicitly or impliedly. 

Likewise, see this Order dt. 03.02.2026 of the Delhi High Court in Paramjit Singh v. FITTJEE Limited, Arb. Pet. 2/2026, which also does not make any reference to S. 11(8) nor complies with it. Worse, the High Court appoints the arbitrator and postpones compliance with S. 11(8) to after the appointment. It also states: 

"13... iv) The Sole Arbitrator is requested to furnish a declaration in terms of Section 12 of the Arbitration Act prior to entering into the reference. In the event of any impediment to the Arbitrator’s appointment on that count, the parties are given liberty to file an appropriate application before this Court."

The effect of this is to cast the burden on the parties for non-compliance by the High Court of the statutory mandate provided in S. 11(8)! That is not the correct approach. 

Contrarily, a perusal of the recent orders of the MP High Court, reveals compliance by the High Court of the mandate under S. 11(8). For instance, in JVS Foods Pvt. Ltd. v. MP State Agro Industries Development Corporation Ltd., 2026:MPHC-JBP:42122, the High Court observes in its Order dt. 17.06.2026:

"19. Considering the list of empanelled Arbitrators issued by the M.P. Arbitration Centre, Jabalpur, following order is passed : (i) Shri Alok Verma, Former Judge, High Court of M.P., AddressAkar, HIG, 1/463, Arvind Vihar, Baghmogaliya, Bhopal (MP)-462043, Mobile No. 79748-54407, 94250-07479, Tel. No.0755-4930600, Email - alokver55@gmail.com, who has consented in terms of Section 11(8) of the Act of 1996, is appointed as sole Arbitrator to resolve the dispute between the parties in the case." (emphasis added).

Whether this amounts to a complete compliance of S. 11(8) is not apparent from the aforesaid observations. However, the attempt to comply with the statutory mandate is at least clear from this Order, in contrast with the orders of the Supreme Court and the Delhi High Court.

Readers may throw more light on whether High Courts and the Supreme Court complies with the statutory mandate under S. 11(8).

Referencing Errors in the Third Schedule to the Arbitration & Conciliation Act, 1996

Third Schedule to the Arbitration & Conciliation Act, 1996 ("1996 Act") is the Geneva Convention of on the Execution of Foreign Arbitral Awards. Article 3 to the III Schedule reads:

"If the party against whom the award has been made proves that, under the law governing the arbitration procedure, there is a ground, other than the grounds referred to in Article 1(a) and (c), and Article 2(b) and (c), entitling him to contest the validity of the award in a Court of Law, the Court may, if it thinks fit, either refuse recognition or enforcement of the award or adjourn the consideration thereof, giving such party a reasonable time within which to have the award annulled by the competent tribunal." (emphasis added)

Article 1 is quoted in its entirety at the end of this blog post. In the III Schedule, it is divided into Articles 1(1) and 1(2). Article 1(1) deals with arbitral awards which are recognisable and enforceable and Article 1(2) concerns the conditions for recognition and enforcement. 

The text of the Geneva Convention does not seem to make this division. Article 1 of the text of the Conventions consists of two paragraphs as noted below:

"In the territories of any High Contracting Party to which the present Convention applies, an arbitral award made in pursuance of an agreement, whether relating to existing or future differences  hereinafter called "a submission to arbitration") covered by the Protocol on Arbitration Clauses, opened at Geneva on September 24, 1923, shall be recognised as binding and shall be enforced......

To obtain such recognition or enforcement, it shall, further, be necessary..."

As would be apparent Article 1 of the Convention was not divided in two sub-articles. However, in the III Schedule this subdivision has resulted in a referencing error in Article 3- there is no Article 1(a) or (c)- there are only Articles 1(2)(a) and 1(2)(c).

The referencing error was not in the Arbitration (Protocol and Convention) Act, 1937. The Second Schedule to the 1937 Act did not divide Article 1 into two parts:

"Article I.-In the territories of any High Contracting Party to which the present Convention applies, an arbitral award made in pursuance of an agreement, whether relating to existing or future differences (hereinafter called " a submission to arbitration ") covered by the Protocol on Arbitration Clauses opened at Geneva on September 24th, 1923, shall be recognised as binding and shall be enforced...

To obtain such recognition or enforcement, it shall, further, be necessary..." 

Hence, Article 3 to the Second Schedule to the 1937 Act did not contain this referencing error. On the other hand, III Schedule to the 1996 Act contains this referencing error in view of the division of Article 1 into two sub-Articles.  The Arbitration and Conciliation (Amendment) Bill, 2024 does not seem to address this referencing error. Somehow, this error seems to have escaped the attention of everyone in the last thirty years. The division in Article 1 to the Third Schedule, not being a reflection of the Convention's text, should be removed in the upcoming amendments to the 1996 Act. 

Article I of III Schedule to the 1996 Act:

"ARTICLE 1.—(1) In the territories of any High Contracting Party to which the present Convention applies, an arbitral award made in pursuance of an agreement whether relating to existing or future differences (hereinafter called “a submission to arbitration”) covered by the Protocol on Arbitration Clauses opened at Geneva on September 24th,1923, shall be recognised as binding and shall be enforced in accordance with the rules of the procedure of the territory where the award is relied upon, provided that the said award has been made in a territory of one of the High Contracting Parties to which the present Convention applies and between persons who are subject to the jurisdiction of one of the High Contracting Parties.

(2) To obtain such recognition or enforcement, it shall, further, be necessary:—

(a) that the award has been made in pursuance of a submission to arbitration which is valid under the law applicable thereto;

(b) that the subject-matter of the award is capable of settlement by arbitration under the law of the country in which the award is sought to be relied upon;

(c) that the award has been made by the Arbitral Tribunal provided for in the submission to arbitration or constituted in the manner agreed upon by the parties and in conformity with the law governing the arbitration procedure;

(d) that the award has become final in the country in which it has been made, in the sense that it will not be considered as such if it is open to opposition, appeal or pourvoi en cassation (in the countries where such forms of procedure exist) or if it is proved that any proceedings for the purpose of contesting the validity of the award are pending;

(e) that the recognition or enforcement of the award is not contrary to the public policy or to the principles of the law of the country in which it is sought to be relied upon."